Interest Rates

[prometheia]

Hi Dunning, was that Westpac loan through a broker?

[Dunning]

No, it was direct, with the same person I've been dealing with for the last 3 years. All loans are below the LVR restrictions. We also had the funds available to be able to take this loan at another bank, which we almost did with everything last year when they wouldn't match offered interest rates fromanother bank.

I've learnt the best way is to look at http://www.mortgagerates.co.nz/ and find the best rate/term and tell Westpac that this other bank is offering x% for x years, can you do better. They come back matching it.

[eri]

The big Australian banks are widely considered to be taking a more cautious approach to New Zealand property lending.

Meanwhile we don't have a second-tier lending sector on the scale we once did because most of the finance companies went bust last decade.

You can unlock all the land you like but someone has to actually stump up some money to build on it.

http://www.nzherald.co.nz/business/n...ectid=11789453

[Wellington Broker]

Just fixed new lending of 450K @ 5.29% 5 years with Westpac, $2,200 cashback.

Looking long term, rates will have to stay below well below 6% for the term for there to be an advantage in a shorter term.
Based on current carded Westpac rates I get the following table:
1 year rate 4.49% 4 years has to be under 5.49%
2 year rate 4.79% 3 years has to be under 5.62%
3 year rate 5.09% 2 years has to be under 5.59%
4 year rate 5.20% 1 years has to be under 5.65%
5 year rate 5.29%




So if I took a loan out for one year @ 4.49%, at the end of the 1 year the 4 year rate would have to be under 5.49% in order to be better that a 5 year @5.29%. i feel that's a safe bet, who knows, I could be wrong and interest rates drop down into the 3's.

Excellent offer from Westpac. Just curious, with this being a rollover and you mentioned it's already been fixed, how recently did they offer those rates?

[Dunning]

Hi WB

This was new lending for PPOR, the rates were from their advertised rates for <80% lending(4 year was from Kiwbank, comparison only) TSB and HSBC both have 5 years @ 5.29% so asked Westpac to match or better. PPOR is less than 80% LVR and investments are around 55% LVR.

[JBM]

Just added another 370k in leading left it on floating 5.15% ....2k cash back .....in talking with the Westpac banker around fixed term rates I see they couldn't match SBS 1yr fixed 4.19% .... as unlike SBS there short term lending funds are mostly being funded by overseas adding more costs than the likes of the smaller lending book of SBS with mostly NZ savers backing the lending

[Nick G]

Why leave it on floating? Is it a RC account?

[xsfat]

For fixed term mortgage rates, the banks have increased them, based on claims that their funding costs have risen.
For floating rates, banks have all failed to pass on the latest decrease in OCR.
Recently BNZ even increased their revolving credit rate. That is just taking the piss.

[Bobsyouruncle]

Anyone advise on minimum deposit for commercial currently and recommend a bank please?

[Don't believe the Hype]

Anyone advise on minimum deposit for commercial currently and recommend a bank please?

why would you not use your existing bank relationships for a commercial purchase?

[Bobsyouruncle]

It's for a relative. Kiwibank want him to put 60% down on a 3.2 mil buy.

[Wayne]

It's for a relative. Kiwibank want him to put 60% down on a 3.2 mil buy.

Not abnormal.
There is no standard minimum deposit for commercial - individual risk accessment based on the buyer and the lease.

[JBM]

Why leave it on floating? Is it a RC account?

not sure want the plan is yet might sell or develop haven't decided

[Perry]

12 months on and how's this prediction looking?

HSBC's five-year fixed home loan rates were dropped from the old standard rate of 6.49 per cent to 5.29 per cent and other terms were cut too.

Massey University banking expert David Tripe said the 10-year wholesale swap rate, for example, had fallen from 4.7 per cent to 3.7 per cent between September 22 and Monday.

We forecast 7.5 per cent nationwide house price inflation this year, compared to 4.7 per cent in 2014," Stephens said, indicating there would be further mortgage interest rate cuts throughout the year.

"Low inflation will prompt financial markets to push fixed mortgage rates even lower early this year," he said.

"Later this decade (2017,8?)we anticipate an economic slowdown associated with the wind down of the Canterbury rebuild, slower population growth as New Zealanders return to a recovering Australian economy, and higher mortgage rates.

Under such conditions we would expect house prices to fall," Stephens said.

http://www.nzherald.co.nz/business/n...ectid=11401823

[Murph]

Just been offered these rates today:
6 months 4.95%
12 months 4.59%
18 months 4.75%
24 months 4.79%
36 months 5.09%
48 months 5.49%
60 months 5.69%